Warren Buffet article in Fortune.com

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lazyfabs
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Warren Buffet article in Fortune.com

Post by lazyfabs » Thu Feb 09, 2012 10:18 am

Nice read especially for those that are somewhat fixated w/ this shinny stuff. Mix what this articles says w/ the boglehead mentality of simplicity through indexing, viola, peace of mind in the end w/ some :dollar in hand.
...What motivates most gold purchasers is their belief that the ranks of the fearful will grow. During the past decade that belief has proved correct. Beyond that, the rising price has on its own generated additional buying enthusiasm, attracting purchasers who see the rise as validating an investment thesis. As "bandwagon" investors join any party, they create their own truth -- for a while...
http://finance.fortune.cnn.com/2012/02/ ... t=My+Yahoo

salud :beer
"I think the best way to find happiness is to stop looking so hard." - Kermit the Frog

KyleAAA
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Re: Warren Buffet article in Fortune.com

Post by KyleAAA » Thu Feb 09, 2012 10:45 am

Buffett really puts gold into perspective. Would you rather own ALL the gold in the world or ALL the farmland in the U.S., plus a few trillion dollars on the side? You could eat pretty well off 400 million acres of farm land, I'd think.

investomajic
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Re: Warren Buffet article in Fortune.com

Post by investomajic » Thu Feb 09, 2012 7:13 pm

KyleAAA wrote:Buffett really puts gold into perspective. Would you rather own ALL the gold in the world or ALL the farmland in the U.S., plus a few trillion dollars on the side? You could eat pretty well off 400 million acres of farm land, I'd think.
Indeed, which leads to the natural thinking of: is the market itself really what provides value for gold or currencies or anything else that doesn't have much utility. IE, if someone owned all the gold (or if someone held all the dollar's), would it be worth anything at all if the ability to buy and sell on the hopes of prices rising/falling were not part of the game? Probably not much as people would replace those units with something else (dollars for some new form of currency, gold for some other precious metal). It is, of course, very hard to argue that owning all the farmland, or all the Exxon's (IE, gas companies) in the world would make them any more or less valuable. This is a very good article.

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bob90245
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Re: Warren Buffet article in Fortune.com

Post by bob90245 » Thu Feb 09, 2012 8:40 pm

I didn't find Buffett's take on gold to be at all convincing. However, I will admit he's very good at throwing around big numbers. But everything is relative. Who's to say that the price of gold is too high or too low? Buyers of gold don't pay attention to those questions, anyway. If gold were like Tulips as Buffett suggests, the price of gold would surely have collapsed by now.
Ignore the market noise. Keep to your rebalancing schedule whether that is semi-annual, annual or trigger bands.

madbrain
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Re: Warren Buffet article in Fortune.com

Post by madbrain » Thu Feb 09, 2012 8:45 pm

investomajic wrote:It is, of course, very hard to argue that owning all the farmland, or all the Exxon's (IE, gas companies) in the world would make them any more or less valuable.
Monopolies tend to be able to set prices, and thus would probably be even more valuable if they were all owned by the same person - until someone finds other ways to grow food, or other sources of energy are competitive .

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Ruprecht
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Re: Warren Buffet article in Fortune.com

Post by Ruprecht » Thu Feb 09, 2012 8:48 pm

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Last edited by Ruprecht on Sun Jul 12, 2015 11:12 am, edited 1 time in total.

Nathan Drake
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Re: Warren Buffet article in Fortune.com

Post by Nathan Drake » Thu Feb 09, 2012 8:49 pm

Not only that, but the article is also pretty scathing towards bonds.

I tend to agree with Buffet. I'm 100% equities.

Great article.

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GregLee
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Re: Warren Buffet article in Fortune.com

Post by GregLee » Thu Feb 09, 2012 9:12 pm

KyleAAA wrote:Would you rather own ALL the gold in the world or ALL the farmland in the U.S., plus a few trillion dollars on the side? You could eat pretty well off 400 million acres of farm land, I'd think.
I'll take the gold, thank you.
Greg, retired 8/10.

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Liquid
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Re: Warren Buffet article in Fortune.com

Post by Liquid » Thu Feb 09, 2012 9:45 pm

Buffet is spot on.

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Langkawi
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Re: Warren Buffet article in Fortune.com

Post by Langkawi » Thu Feb 09, 2012 9:52 pm

Once again, Bogleheads show that no matter whether they love or hate Warren Buffett, they absolutely refuse to spell his name properly.

madbrain
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Re: Warren Buffet article in Fortune.com

Post by madbrain » Thu Feb 09, 2012 10:06 pm

Nathan Drake wrote:Not only that, but the article is also pretty scathing towards bonds.
I tend to agree with Buffet. I'm 100% equities.
That isn't what he saying in the article, though. From the article :
"Under today's conditions, therefore, I do not like currency-based investments. Even so, Berkshire holds significant amounts of them, primarily of the short-term variety. At Berkshire the need for ample liquidity occupies center stage and will never be slighted, however inadequate rates may be. Accommodating this need, we primarily hold U.S. Treasury bills, the only investment that can be counted on for liquidity under the most chaotic of economic conditions. Our working level for liquidity is $20 billion; $10 billion is our absolute minimum.
I would think individual investors would also have a need for liquidity. You can't pay your utility bills, groceries, etc. with 100% equities.

Nathan Drake
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Re: Warren Buffet article in Fortune.com

Post by Nathan Drake » Thu Feb 09, 2012 10:09 pm

My need for liquidity is provided by my job. I have a 6 month emergency fund that I use to pay down bills.

Technically I'm not 100% equities, but I don't really count my emergency fund account as part of my investments.

madbrain
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Re: Warren Buffet article in Fortune.com

Post by madbrain » Thu Feb 09, 2012 10:19 pm

Nathan Drake wrote:My need for liquidity is provided by my job. I have a 6 month emergency fund that I use to pay down bills.

Technically I'm not 100% equities, but I don't really count my emergency fund account as part of my investments.
Personally, I look at my entire portfolio of assets, and that does include the emergency funds. They are invested too, just in less risky stuff, like FDIC-insured accounts earning less than the rate of inflation right now. But even that may change.

MCSquared
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Re: Warren Buffet article in Fortune.com

Post by MCSquared » Fri Feb 10, 2012 11:17 am

lazyfabs wrote:Nice read especially for those that are somewhat fixated w/ this shinny stuff. Mix what this articles says w/ the boglehead mentality of simplicity through indexing, viola, peace of mind in the end w/ some :dollar in hand.
...What motivates most gold purchasers is their belief that the ranks of the fearful will grow. During the past decade that belief has proved correct. Beyond that, the rising price has on its own generated additional buying enthusiasm, attracting purchasers who see the rise as validating an investment thesis. As "bandwagon" investors join any party, they create their own truth -- for a while...
http://finance.fortune.cnn.com/2012/02/ ... t=My+Yahoo

salud :beer
What motivated Buffett when he bought 35% or so of the world's above ground supply of silver 10 or 12 years ago? Was it an investment or speculation?

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